At issue is the scheduled expiration on November 1 of a law, initially enacted in 1998, that says local governments generally cannot tax Internet access, including DSL (digital subscriber line), cable modem and BlackBerry-type wireless transmission services. The law also prohibits governments from taxing items sold online in a different manner than those sold at brick-and-mortar stores, but it does not deal with sales taxes on online shopping.
The article goes on:
But previous attempts at renewing the ban for more than two to four years have failed, in part because of resistance from state and local government lobby groups. State government representatives caution against making the moratorium permanent, saying it would deprive states indefinitely of vital revenue sources and that its original purpose--boosting the nascent Internet to commercial viability--has essentially been accomplished.
The argument is that the state is entitled to your money---that simple.
A separate issue on one politician's mind was what to do about the collection of sales taxes on the Internet. State governments have long griped that they are losing revenue to booming e-commerce businesses that aren't required to collect taxes from customers in states where the businesses don't have a physical presence. Rep. Bill Delahunt, a Democrat from Massachusetts, said he was planning to try again at enacting a bill designed to address those concerns.
Newsmax.com also has a story up about this:
Proposals in the U.S. Congress could lead to taxes on Internet shopping, broadband connections and even e-mail by this fall. State and local governments are lobbying Congress to gain the ability to impose the new taxes.
Sen. Michael Enzi, a Wyoming Republican, has introduced a bill that would usher in mandatory sales tax collection for Internet purchases, the CNET News.com Web site reported.
And the House has held a hearing to decide whether to let a temporary ban on Net access taxes lapse when it expires in November.
"With Democrats now in control of both chambers of Congress, the political dynamic appears to have shifted in favor of the pro-tax advocates and their allies on Capitol Hill,” according to CNET.
But Sen. Ted Stevens, an Alaska Republican, said he prefers "an impregnable ban on taxes on the Internet.”
If the ban on Net access taxes is allowed to lapse, states and municipalities could impose an array of access taxes, just as they now do on telephone bills.
Internet users could then see a tax on e-mails, said Sen. John Sununu, R-N.H., who added:
"They might say, ‘We have no interest in having tax on e-mail,’ but if we allow the prohibition on Internet taxes to expire, then you open the door on cities and towns and states to tax e-mail or other aspects of Internet access.”
Can you believe this? This just goes to show that the government wants its hands on everything. It's one thing to discuss the issue of sales taxes on online purchases, but taxing internet use itself, and even email use? I remember these as rumors way back in the late 90's, but it sounds like its all too real now.
It should be obvious to everyone that if this ban lapses, taxes will increase. And I would be surprised if Iowa Democrats didn't go after it. They are already want to tax Internet downloads, seriously looking at it this past session. With how much they are increasing spending during this legislature's sessions, the Democrats are going to be looking for as many tax dollars as they can get. All I can say is hold onto your wallets.
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